Ray Dalio – Just Another Member of the Big Club?
Ray Dalio – Just Another Member of the Big Club? by Rory, The Daily Coin
As I was skipping around looking for another piece of news to publish here at TDC, I came across an article featuring Ray Dalio. I figured it would be worth looking into since Mr. Dalio has a huge following and a somewhat respected voice within the new media community. It seems something happened on the way to the parade.
Ray Dalio is one of the more successful hedge fund managers around. Bridgewater is one of the most successful funds on the planet.
Last year Mr. Dalio stated the ECB and BOJ had anywhere from a few months to 5 years of survival. It seems that something has changed, maybe it has to do with the Federal Reserve making insignificant changes to the Fed Fund Interest Rate. These changes, which are something positive, are no where near enough and probably way too late to effectively change the path of our current demise. Please keep in mind the ECB and BOJ work hand-glove with the Federal Reserve and when one sneezes the others catch a cold.
As Mr. Dalio pointed out in September 2016
Luckily, in a recent analysis, Ray Dalio’s Bridgewater asked precisely this question, and even better, provided the answer to how much time is left until both the ECB and BOJ hit the limits on their existing programs.
As the chart below shows, assuming no changes to existing programs, the ECB and the BOJ, the two central banks most actively monetizing debt currently, have 8 and 26 months respectively, if they do no changes to their programs.
However, if incremental easing is layered on, like expanding the scope of their bond buying programs or purchasing equities even more aggressively, the total rises substantially. The final answer: 68 months, or just above 5 and a half years, in the case of the ECB, were it to steamroll all political opposition and monetize virtually every possible bond (and 20% of the equity market), and 48 months, or 4 years, in the case of the BOJ. Source
When we reported that Mr Dalio sounded disgusted with central banks and these policies, in 2016, it seemed only natural to be getting a follow up to the following –
We are going to have to move toward, increasingly, the making of purchases that put money directly in the hands of spenders. Because the linkage between having money in the financial assets and having spending is becoming weaker and weaker. **** Monetary Policy 1 – interest rates have become ineffective. Monetary Policy 2 – Quantitative Easing – purchasing financial assets by the people that own financial assets has become ineffective. Monetary Policy 3 – Central Banks, around the world, printing money and putting money directly in the hands of consumers. Source
It seems Mr. Dalio now thinks these policies are great and the central banks have provided an invaluable service to humanity.
“Generally speaking (depending on the country), it is appropriate for central banks to lessen the aggressiveness of their unconventional policies because these policies have successfully brought about beautiful deleveragings,” he writes.
“We should savor this accomplishment and thank the policy makers who fought to bring about these policies. They had to fight hard to do it and have been more maligned than appreciated.” Source
How can you go from questioning central banks and pointing out their demise to praising them for the exact same crime in less than a year? Oh, that’s right, you are one of the people benefiting from all the crimes committed by the central banks against the people of the world. So, that’s correct that I have zero appreciation for people that have stolen my wealth and claimed it as their own. I have zero appreciation for the fact that only a handful of people have not been decimated by the ongoing policies of the Federal Reserve and supported by the Treasury Department. These criminals should be in front of a tribunal for financial crimes against humanity instead of getting a pat on the back.